Title
Report regarding a proposed Development Agreement to extend approved entitlements to construct a new Office/R&D Campus and multi-family residential building at 180 El Camino Real in the Planned Development (PD) Zoning District for a period of ten (10) years in exchange for payment of Community Benefits Monetary Contribution obligations in accordance with Title 19 and 20 of the South San Francisco Municipal Code and making findings regarding the consistency of the proposed action with the adopted Addendum to the 2009 Environmental Impact Report pursuant to the California Environmental Quality Act. (Billy Gross, Principal Planner)
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MOTIONS TO ADOPT STAFF RECOMMENDATIONS:
(1) Move to waive reading and introduce an ordinance finding that the Development Agreement is in compliance with CEQA and approving the Development Agreement.
RECOMMENDATION
Recommendation
Staff recommend that the City Council conduct a public hearing and take the following action:
1. Waive reading and introduce an Ordinance adopting a Development Agreement to extend approved entitlements to construct a new Office/R&D Campus and multi-family residential building at 180 El Camino Real in the Planned Development (PD) Zoning District for a period of ten (10) years in exchange for payment of a Community Benefit Monetary Contribution obligations in accordance with Title 19 and 20 of the South San Francisco Municipal Code and making findings regarding the consistency of the proposed action with the adopted Addendum to the 2009 Environmental Impact Report pursuant to the California Environmental Quality Act.
Body
BACKGROUND/DISCUSSION
Project Description
The overall 180 El Camino Real site was previously developed as the Safeway Shopping Center, consisting of a 14.5-acre lot with frontages on El Camino Real, South Spruce Avenue, and Huntington Avenue. In 2020, the Planning Commission approved entitlements that subdivided the lot into two parcels. The smaller 3.28-acre parcel was approved as a new Safeway store and ancillary commercial uses. That project is now under construction, with an anticipated completion date of Summer 2026.
In 2022, a mixed-use, multi-family residential and life sciences project was entitled on the larger 11.24-acre parcel. The project would include approximately 750,000 square feet of Office/R&D uses and 25,000 square feet of other supporting non-residential area, a 183-unit residential building, and a parking structure. The project is designed as a transit-oriented development, and includes pedestrian, bicycle, and a series of publicly accessible open space amenities. The project architecture and site plan are intended to activate the street level along both El Camino Real and South Spruce Ave.
The Office/R&D and multi-family project was considered and recommended for approval by the Planning Commission on August 19, 2022, and approved by the City Council on September 14, 2022. Per South San Francisco Municipal Code Section 20.450.011 (Expiration and Extension), entitlements automatically expire if building permits have not been issued within two years from the date of final approval. This code section also allows a one-year time extension approval with Chief Planner approval, which Steelwave applied for and was granted. Therefore, a total entitlement timeframe of three years is applicable prior to expiration.
Development Agreement Request
Since entitlement in 2022, the Office/R&D sector has faced serious challenges - higher than typical vacancy rates, contraction in the capital markets, high borrowing costs and a glut of new Class A space in the Bay Area. Simply put, there is contracting demand and investment for new Office/R&D construction. The City has issued one new building permit for a life science project in the past two years (at 580 Dubuque Avenue). Similarly, the Residential sector has also stalled, particularly in relation to project financing. Based on this, the applicant approached the City to discuss a development agreement to extend entitlements on their life science / residential campus to allow the life science and residential markets to steady and recover.
The draft Development Agreement (attached to the Resolution as Exhibit A) includes the following key terms:
• Ten (10) year term from effective date
• Payment of all applicable Development Fee rates at time of permit issuance
• Payment of Community Benefit Monetary Contributions, as follows:
o First Payment of $480,000 by the 1st anniversary of the effective date
o Second Payment of $480,000 by the 3rd anniversary of the effective date
o Third Payment of $720,000 by the 5th anniversary of the effective date
• In lieu of paying the Third Payment as of the fifth (5th) anniversary date, Developer may elect to provide written notice to the City of its desire to terminate the Agreement
• All fees paid are non-refundable but can be transferred to a new project owner/developer
These terms are in keeping with the recently approved development agreement terms for the 800 Dubuque project. As with that project, the intent is to provide additional time for the applicant and a small but steady stream of payments to the City for community reinvestment. The City Council may choose to use Community Benefit Monetary Contributions broadly for public infrastructure, mobility improvements, local business support, affordable housing, public services and facilities, and even sea level rise mitigation.
GENERAL PLAN AND ZONING CONSISTENCY ANALYSIS
The Project site’s General Plan land use designation and Zoning Ordinance designation are both Planned Development (PD); the project was entitled prior to the adoption of the current General Plan and Zoning Ordinance, but was designed to provide a transit-oriented mixed-use development that will revitalize an underutilized and vacant property, provide active street frontages and open space amenities, focus on pedestrian and bicycle linkages, and establish a high-quality design precedent, all of which are consistent with the goals of the previous and existing General Plan and Zoning District. The draft Development Agreement does not propose any changes to the previously entitled project.
ENVIRONMENTAL REVIEW
An Addendum to the 2009 Environmental Impact Report for the South El Camino Real General Plan Amendment and associated Zoning Ordinance amendments was prepared by the City with assistance from Lamphier-Gregory, Inc. for the 180 ECR Life Sciences and Residential Project and was approved by the City Council on September 14, 2022. The Addendum determined that the project is consistent with previously adopted environmental documents and that no further environmental review is required pursuant to CEQA Guidelines sections 15162 and 15164.
Extension of the entitlements will not result in any changes to the project currently - if, during the Development Agreement, the applicant proposes changes to the configuration of buildings, site planning, or operational features, a new environmental analysis may be warranted. But under the current circumstances, no further environmental study is required, and the project is consistent with the approved Addendum.
PLANNING COMMISSION MEETING
The Planning Commission is reviewing the proposed Development Agreement on August 21, 2025. Staff will provide Council with an update on the Planning Commission’s discussion during the Council hearing.
CONCLUSION
The draft Development Agreement is an opportunity to confirm the City’s commitment to the project entitlements for the 180 ECR Life Sciences and Residential project, recognize the unique economic circumstances facing the life science and residential markets, and ensure a stream of community benefits payments for reinvestment.
Based on the above analysis, staff recommend that the City Council take the following action:
1. Waive reading and introduce an Ordinance adopting a Development Agreement to extend approved entitlements to construct a new Office/R&D Campus and multi-family residential building at 180 El Camino Real in the Planned Development (PD) Zoning District for a period of ten (10) years in exchange for payment of a Community Benefit Monetary Contribution obligations in accordance with Title 19 and 20 of the South San Francisco Municipal Code and making findings regarding the consistency of the proposed action with the adopted Addendum to the 2009 Environmental Impact Report pursuant to the California Environmental Quality Act.
Attachments
1. Staff Presentation
Associations
1. Development Agreement Ordinance (25-772)
a. Exhibit A - Development Agreement